A Letter from a Grandchild with Special Needs | Dear Grandma and Grandpa…

December 9, 2011

Filed under: Special Needs Planning,Special Needs Trusts — Christopher J. Berry @ 5:56 pm

The Voice is the e-mail newsletter of the Special Needs Alliance. This installment was written by Special Needs Alliance member Edward Wilcenski, a founding partner of the law firm of Wilcenski & Pleat PLLCin Clifton Park, New York. He practices in the areas of Special Needs Planning, Elder Law, and Trust and Estate Planning and Administration. Ed is a past President of the Special Needs Alliance, and writes and lectures frequently on issues affecting individuals with disabilities and their families 

Long-time readers of The Voice know that we rarely repeat an issue. In the world of disability there are many important topics to choose from, so the challenge has really been in deciding which topics are of most interest to our readers rather than finding something interesting in the first place. Because the Voice has many new readers each year, we know that many of our current readers may have missed this article when it first appeared in November of 2010. With this in mind, we’ve decided to reprint this article written by Edward V. Wilcenski, hoping that it may catch newer readers before they make their final decisions on how to make holiday gifts to their family members and friends with disabilities.

Dear Grandma and Grandpa…
Each year as we approach the holiday season, we receive questions from our clients as to how grandparents and other relatives can make gifts to children with special needs without creating problems for government benefits. These conversations don’t involve gifts of toys and other items of personal property, since these items are typically excluded as “exempt” resources and have no impact on public benefits. Instead, the questions usually involve how grandparents and other family members might make gifts of cash or other financial assets. 

Most of our clients are informed enough to know that a direct gift of cash is almost always a bad idea. In fact, the challenge often lies not in the discussion of the type of gift, but rather in determining how best to raise the topic in the first place. Indeed, discussions of money can often be awkward and uncomfortable for both sides.

In this issue of The Voice, we thought it might be helpful if we wrote a letter to Grandma and Grandpa on behalf of the grandchild with special needs, in hope that it may facilitate a more detailed discussion with those who are inclined to be generous.

Dear Grandma and Grandpa:

Thank you so much for thinking about me again at this time of year. I know how lucky I am to have such generous family and friends. I am writing this letter to you because sometimes things that are done with the best intentions can result in unintended problems. Sometimes those problems occur immediately, but in many cases they don’t happen until many years later.

I understand that you are concerned that I may not be able to work and support myself when I get older and that you would like to provide some financial assistance to help make it easier for me when that day comes. I want to explain some of the things that can happen when these acts of generosity are carried out for the right reasons, but in the wrong way.

Counting Your Nickels

You probably know that I get special help because of my disability. Sometimes that help comes in the form of a check each month, and sometimes that help comes in the form of government funded insurance to pay for social workers, therapists, and other aides that are not available through the school district or through mom and dad’s health insurance. These programs have very strict limits on what I can own and what I can earn. When someone gives me money or opens an account in my name, I have to tell the government that I have assets in my name (even if I’m too young or incapable of spending it). When that happens, it puts my benefits at risk.

Delaying (not avoiding) the Problem

You might be thinking that a safe way to make gifts is to open an account which is not available to me until I reach 18 or 21. This is partially true, because some government programs will disregard these accounts until I reach the age when the account will be put into my name. More often than not, however, these accounts create significant complications in the future, often involving additional time, effort and expense at precisely the time when you thought the money would be available to help.

For example, a Uniform Transfers to Minors Act (UTMA) account becomes my property when I reach the age of 18 or 21. This occurs automatically, regardless of whether I am participating in one of those means tested government programs, and even if I am not capable (because of my disability) of managing that money. When this happens, I am really stuck. On the one hand, by law the money is considered mine when the account terminates on my 18th or 21st birthday. This means I will likely lose my Supplemental Security Income (SSI), Medicaid and other government benefit programs as of that date. Yet, at the same time, my disability may prevent me from making my own decisions with the money, so I may not be capable of taking any steps in order to protect my eligibility for benefits. In many cases I will need to hire a lawyer in order to get court permission to put the money in a different type of account, usually a type of “first party supplemental (special) needs trust” account. Depending on the amount in the account, I could end up with quite a bit less than you originally intended once the costs and expenses of the proceeding have been paid. In addition, any funds remaining in that trust at my death would have to first reimburse the government for any services it has paid on my account through the Medicaid program before it could pass to anyone else (your other grandchildren, for example). I know you wouldn’t want that.

Words Matter

I know that you have been buying savings bonds for me from the day I was born. Sometimes you put my name on the bond, sometimes you put both my parent’s and my names on the bond, and sometimes you put my parent’s name on the bond, “payable on death” to me. These bonds can create the same types of problems that a Uniform Transfers to Minors Act account can create. At some point they will be countable in determining my continuing eligibility for one of these really important programs, and I may not be capable of taking any steps to protect the bonds without the assistance of a lawyer and the permission of a judge.

The Unlucky Beneficiary

Maybe you were thinking that you can avoid some of these problems by waiting until the end of your life before the property is given to me, perhaps by naming me as a beneficiary on a life insurance policy, an annuity, or even a small retirement account. But remember that those proceeds are available (and countable) to me when you die if I am the named beneficiary. Just as with the Uniform Transfers to Minors Act account, the government benefit programs will count any assets that come to me by beneficiary designation.

Hoping for the Best, but…

While it may be difficult for you (and for me) to admit, it could turn out that I will not be ready to manage money when I turn 18 regardless of possible concerns with government benefits. We both know how difficult it is to predict how any young child may act when he or she reaches adulthood. I may be able to read and write, have conversations, go to school and hold down a job, but I may simply be unable (or unwilling) to make good decisions with my money. I may spend it irresponsibly, I may give it away, or (worse yet) I may not be able to tell when someone is taking advantage of me. Government benefits aside, it just may not be a great idea for me to have direct access to a lot of money when I get older.

What Can You Do?

There are ways that you can help me. Depending on the size of the gift, it may be easiest to simply give the gift to my parents and ask them to hold it for me. So long as the bank account is in their name and uses one of their social security numbers, it won’t create a problem with my government benefits. For smaller gifts, this can be the best solution.

If you think that I may one day go on to higher education, you could open a “529 Account” for my benefit. These accounts earn money on a tax free basis, and have other tax advantages too. But the most important thing is that the accounts are considered owned by the person holding the money (i.e., the “owner” of the account), and not the person who might be using the money to pay for education expenses at some point in the future. Some grandparents open these accounts in the name of their children (i.e., the parent of the child with special needs). If it turns out that I’m not able to go to school, the money could be used for one of your other grandchildren who will have that opportunity. Your financial advisor can help you set up one of these accounts (although you might want to check with my parents’ special needs trust lawyer to be sure the account is titled correctly, and that the government benefit program rules which deal with these types of accounts haven’t changed).

It may be that my parents have done their estate planning and have already created a “supplemental (special) needs trust” for me as part of that plan. These trusts are specifically designed to hold money for people with special needs, and can provide the best of both worlds: a trustee is appointed to manage the money (sometimes a parent will serve as the trustee), and the trust is “exempt” in determining eligibility for most government benefit programs (i.e., the government won’t treat the money as if I own it). You could also name the trust as the beneficiary of a life insurance policy or retirement account. Just remember that if you are thinking about a significant sum of money, it’s important for you to talk to a lawyer who has experience working with these types of trusts.

And, of course, you could always buy me some toys…

But In The End, What I’m Really Thankful For…

…is knowing that you are thinking about me this holiday season.

About this Newsletter: We hope you find this newsletter useful and informative, but it is not the same as legal counsel. A free newsletter is ultimately worth everything it costs you; you rely on it at your own risk. Good legal advice includes a review of all of the facts of your situation, including many that may at first blush seem to you not to matter. The plan it generates is sensitive to your goals and wishes while taking into account a whole panoply of laws, rules and practices, many not published. That is what The Special Needs Alliance is all about. Contact information for a member in your state may be obtained by calling toll-free (877) 572-8472, or by visiting the Special Needs Alliance online.

“Reprinted with permission of the Special Needs Alliance -www.specialneedsalliance.org.”

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Estate Planning for Michigan Families with Special Needs Children

August 19, 2010

Filed under: Estate Planning,Special Needs Planning,Special Needs Trusts — Christopher J. Berry @ 9:23 pm

It was a pleasure to present with Nicole Beurkens of Horizons on the topic of Legal Issues Facing Families with Special Needs Children. Nicole is in the Grand Rapids area, while I am near Detroit, in the South-East Michigan area, more specifically, Bloomfield Hills.

We had a phone conference, that Nicole hosts regularly for her clients. The reach of the call included Michigan, as well as outside the state, as we discussed topics relevant to estate planning and special needs planning, including the use of special needs trusts.

If you haven’t visited the Horizon’s website you should at http://www.horizonsdrc.com/.

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SSI, SSDI, SSA, and SNT- What Do They All mean?

February 12, 2010

Filed under: Special Needs Planning,Special Needs Trusts — Christopher J. Berry @ 3:54 pm

There are quite a few acronyms in estate planning and special needs planning. Long Island Special Needs Planning Lawyer Ellen A. Victor has a great post on the differences between Social Secuirty Disability Income (SSDI) and Supplemental Security Income. You can read her post here: The Difference Between SSI and SSDI is More than Just a Letter.

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Special Needs Trust Presentation in Canton, MI

April 7, 2009

Filed under: Estate Planning,Special Needs Planning,Special Needs Trusts — Christopher J. Berry @ 1:17 am

Last night I presented to a small group of parents with special needs children at a Canton, MI middle school.  In addition to my presentation with a colleague, there was a representative of ARC of Wayne County.  We advised the parents on the legal and financial ramifications of planning for children with special needs.  My portion dealt with the estate planning issues parents with special needs children must consider.

We covered the different types of special needs trusts and how Michigan special needs trusts work.  For example, through proper planning we can

  1. Protect eligibility for governmental benefits
  2. Provide a higher quality of life
  3. Provide a framework for care and management of assets
  4. Allow parents to express their desires for care and development of their special needs child
  5. Protection from creditors and predators
  6. Extend the life of the asset

Also we covered common mistakes parents make when planning for their special needs child, including:

  1. Disinheriting their special needs child
  2. Relying on other children to care for their special needs child
  3. Failing to provide privacy for their child with special needs
  4. Choosing the wrong Trustee for their Michigan special needs trust
  5. Choosing the wrong professionals to advise them

For a copy of the presentation notes, send me an email in the contact form and I’d be happy to provide it to you.

-Christopher J. Berry, Esq.
Michigan Estate Planning Lawyer

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Legalzoom, Suze Orman Trusts, etc vs. Attorney Services

March 25, 2009

Filed under: Do It Yourself Estate Planning Gone Wrong,Estate Planning,LegalZoom,Probate,Quicken Willmaker,Special Needs Planning,Special Needs Trusts,Suze Orman — Christopher J. Berry @ 1:36 am


As a Michigan estate planning lawyer, I am not worried about the effect of the Legalzoom, Suze Orman Trust-in-a-box, or Quicken Willmakers of the world.  What I do worry about is the effect of those products on the general public.  Our Michigan estate planning office has seen far too many people using these cheap products, trying to substitute cheap forms for experienced legal estate planning advice of attorneys, with often times, poor consequences.

Those consequences include, assets going through a Michigan probate, that shouldn’t, disqualifying special needs children from governmental benefits, unintended distributions of assets to individuals not planned for and on and on and on.  Why leave it up to chance that your heirs may have to clean up your mess because you decided to save a few bucks?

There are times where having no plan at all and relying on the Michigan laws of intestacy are better than relying on these cheap forms.

The blog by the Los Angeles Estate Planning Lawyers of the Proviso Law firm had an interesting post on this topic.  You can read it here : Los Angeles Estate Planning Lawyer.

-Christopher J. Berry, Esq.
Bloomfield Hills Estate Planning Lawyer

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Estate Planning Considerations

March 10, 2009

Filed under: Estate Planning,Holistic Estate Planning,Special Needs Planning,Special Needs Trusts — Christopher J. Berry @ 1:52 am

I was reviewing my materials for an upcoming presentation.  One of the topics that I will touch on is why people seek out Michigan estate planning lawyers in the first place.  What are the thoughts, concerns and considerations that most people have in terms of their estate planning?  Some questions to ask are:

1) Do you have a plan in place to manage your care if you were incapacitated?
2) If you have minor children, what would happen to them if you died?
3) Whom do you want to take care of their needs?
4) Should your children receive their full inheritances at age 18?
5) Will some heirs need help managing large sums of money?
6) Are there any family members with special needs?

-Christopher J. Berry, Esq.
Metro Detroit Wills, Trusts, and Estate Planning Lawyer

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Special Needs Trusts | How They’re Funded Determines The Type

March 5, 2009

Filed under: Estate Planning,Special Needs Planning,Special Needs Trusts — Christopher J. Berry @ 2:01 am

In Michigan, how a special needs trust is funded determines what type of special needs trust needs to be created.  A special needs trust is created to ensure that loved ones receive needed governmental benefits while protecting assets that can be used to improve quality of life.

If a special needs trust is going to be funded by a family member, friend either through gifting or an estate plan, a third party special needs trust can be created.

The second type of special needs trust, called a first person special needs trust, is created by the person who wishes to receive governmental benefits.

Special needs trusts have specific rules depending on which type of special needs trust is used, that is why it is important to speak with a Michigan special needs trust lawyer who is familiar with the area of law.

-Christopher J. Berry, Esq.
Michigan Wills and Trusts Attorney

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Michigan reveals goals on autism services

March 19, 2013

Filed under: Estate Planning,Special Needs Planning — Christopher J. Berry @ 4:17 pm

Long-term goals have been laid out by State health officials designed to improve access to services for the estimated 50,000 people living with autism spectrum disorders in Michigan, including more early screening and the creation of a state resource center to assist families.

(Related: 5 Tax Deductions & Credits For Special Needs Families)

The Autism Spectrum Disorders State Plan unveiled by the Michigan Department of Community Health and Autism Council revealed gaps in the availability of services and makes recommendations for how to improve the lives of adults and children with autism spectrum disorders. Included in the group of developmental brain disorders is autism, Asperger syndrome and Rett syndrome.

(Related: MSU Study Indicates Link Between Autism, Larger Brain Ventricles)

Father to a daughter with autism, Lt. Gov. Brian Calley said the overall goal is that eventually, “Michigan will be the place to be if you’re a family that is living with an autism spectrum disorder.”

The plan calls for increased early screening for autism spectrum disorders by primary care providers to enable those needing treatment to get it sooner. According to the report,  a number of primary care providers are not aware of the early signs of autism spectrum disorders. As a result, the report calls for increased and improved training of primary care providers to help them identify symptoms that could point to a disorder.

Amy Matthews, vice-chair of the Autism Council, said the number of children diagnosed with autism is continuing to rise dramatically. According to the report, one in every 88 children is affected by an autism spectrum disorder today.

(Related: Not all Therapists are Created Equal)

According to the report, more than 45 percent of parents with children ages 13 to 25 said they needed better access to things like higher education and employment services to help their child transition to adulthood. Creating a state resource center where adults living with autism and their families could get information and be connected to available services would go great lengths to alleviate this need.

The plan will be implemented by the Autism Council, a group within the MDCH. The department did not lay out a timeline for when the plan will be put in place. Last year, Calley signed a bill mandating that insurance companies provide coverage for autism treatment for children. Starting in October, insurers have been able to be reimbursed through a $15 million autism coverage incentive fund.

Read more: http://www.detroitnews.com/article/20130318/POLITICS02/303180377/Michigan-release-plan-autism-services?odyssey=mod%7Cnewswell%7Ctext%7CFRONTPAGE%7Cp

Marc H. Wander is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning.  Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander

5 Tax Deductions & Credits For Special Needs Families

February 25, 2013

Filed under: Estate Planning,Special Needs Planning — Tags: , , , , , , , , , , , , , , , , , — Christopher J. Berry @ 6:24 pm

There are many tax deductions and credits available for parents of children with special needs. Parents of children with special needs should familiarize themselves with the deductions and credits and document all expenses related to their children’s medical expenses, development and therapy. Below you will find five useful tax deductions and credits for parents of children with special needs.

1. Medical & Therapy Expenses
For income tax purposes, learning disabilities are a type of medical condition. This may include autism, ADHD, cerebral palsy, and other learning disabilities.

(Related: Study reveals more middle-aged adults care for kids and aging parents)

While these expenses are limited by 7.5 percent of adjusted gross income, the limitation may be exceeded by certain types of out-of-pocket expenses such as:

  • Special schooling like tutoring that is specifically intended to address the special needs of the child.
  • Regular education when it is intended to treat the child’s special needs.
  • Aides that a child may require to benefit from education.
  • Exercise programs, if recommended by a medical professional.
  • Transportation to and from special schools or therapy sessions.
  • Equipment, devices and supplies necessary to treat or alleviate a medical condition, including technology items such as communication devices.

2. Specialized Foods
A gluten-free, casein-free diet can be used as a deduction provided it is medically recommended. Most times, only the additional cost of the specialized foods over and above what would similar items would cost is deductible.

(Related: Summer Camps For Individuals With Special Needs)

3. Legal Expenses
In some instances, legal expenses related to your child’s special needs may be deductible, for example if you hire an attorney to help prove that your child’s medical expenses are legitimate.

Tax Credits
A tax credit applies directly to the amount of tax you owe. The tax credits most helpful to parents of special needs children are the Child and Dependent Care Credit and the Earned Income Credit. In both scenarios, a credit that is typically only available for children may also be used for an older child with special needs.

4. Child and Dependent Care Credit
This credit may be applied when you pay someone to care for your dependent, and it provides a tax credit of up to $3,000 per dependent, to a maximum of $6,000 for all dependents. Child-care, after-school programs and day camp qualify for the credit.
The credit is available for children under the age of 13, but the age limit does not apply to older children with special needs.

(Related: Planning for a Loved One with Special Needs)

5. Earned Income Credit
The Earned Income Credit generally may be applied by families with a low to moderate income and children under the age of 19, or up to age 23 for full-time students. However, for adult children living with their parents, the age limit does not apply.

Careful planning with the assistance of an experienced attorney who is sensitive to special needs issues can ensure you do what is necessary to reduce your tax burden and protect your child’s interests. is an experienced Special Needs Attorney ready to help you and your child with special needs.

Marc H. Wander is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning.  Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander


Marc Wander Speaks On Planning For A Loved One With Special Needs

January 15, 2013

Filed under: Estate Planning,Events,Special Needs Planning,Special Needs Trusts — Tags: , , , , , , — Christopher J. Berry @ 6:45 pm


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